National borders are no match for e-commerce

Online retailers today are increasingly looking beyond their national borders to gain customers and spur growth. And few are doing this as aggressively as Hiroshi Mikitani, chairman, CEO and co-founder of Rakuten Inc., a Japan-based operator of online marketplaces since 1997.

Until 2010, Rakuten’s online marketplaces were limited to Asia, but since then a rapid-fire series of acquisitions and internal moves have made it a multinational, global company. It now operates marketplaces in 13 countries, including the United States, the United Kingdom, Germany and Brazil, and Mikitani says he’s not done expanding. “From day one we wanted to go international. I was quite aware that [e-commerce competition] was going to be global sooner or later,” he says.

Mikitani doesn’t believe national borders should limit e-commerce, and he’ll lay out how he came to this realization and how he’s leading Rakuten to operate this way during his keynote presentation at the Internet Retailer Conference & Exhibition 2013 in Chicago in June. Mikitani’s presentation will take place from 8:45 a.m.-9:15 a.m. on June 5.

In the keynote address, entitled “Spanning the globe for e-commerce opportunity,” Mikitani will explain his approach to global expansion and how he figures out where he wants to take Rakuten next. Over the last three years, Rakuten has expanded globally in three ways: through acquisition, such as its purchases of Buy.com in the United States and Play.com in the United Kingdom; by investing in existing web companies like Russian e-retailer Ozon.ru and social network Pinterest; and by establishing startups in countries where Rakuten sees potential to grow. “In developing and emerging markets we go in very small and we create,” he says. He says consumers in these markets are less familiar with online shopping and Rakuten has to convince consumers that shopping online is a good, reliable option. “Our approach is, ‘Don’t rush. Create a sound business and create the initial momentum.’”

Mikitani’s commitment to borderless e-commerce initiative is felt throughout Rakuten, he says. Coinciding with its expansion beyond Japan, Mikitani in 2010 launched his self-proclaimed “Englishnization” initiative. The intention was to immediately have the company conduct business in English. “The global marketplace demands the speed of a single language. There is no time for translation, no time for misunderstanding,” Mikitani writes in “Marketplace 3.0,” his new management book. Now, when employees from Rakuten’s far-flung offices log in for the weekly management meeting every Thursday or Friday—depending which side of the dateline they are—language isn’t a hindrance.

Rakuten also is positioning itself as a merchant of digital goods. In 2012, it acquired Kobo Inc., a Canadian maker of e-book readers and seller of e-books that competes globally with Amazon.com Inc.’s Kindle devices and digital bookstore. Also in 2012, it acquired Wuaki.TV, a video streaming service based in Spain.

Internet Retailer’s editors asked Mikitani to speak at IRCE because he co-founded Rakuten with just a handful of team members and proceeded to build the company into the largest e-commerce company in Japan, and the second-largest in Asia. With operations now in more than a dozen countries, he is taking his approach to e-commerce global.